The math around the Midtown South rezoning is confusing.
Specifically, the adjustments that the City Council made ahead of approving the rezoning underscore just how slippery the housing projections that accompany major zoning changes can be. Were 141 potential housing units lost? Closer to 500? Or 1,000?
As part of the environmental review process, the Department of City Planning identifies development sites that are likely to be redeveloped if zoning changes are made, based on a number of factors. That doesn’t mean the agency has received confirmation from the owners of these sites that they will actually take advantage of the rezoning.
By the same token, some sites where the owners are keen to redevelop aren’t necessarily included in those projections.
Consider Expansion Group’s 554-568 Eighth Avenue, a 21-story, vacant office building that was being marketed as a potentially ideal office-to-residential conversion, thanks to the rezoning. The property was part of an area the City Council excluded from a new residential district mapped in the northwest quadrant of the rezoning.
Per City Council: The rezoning would pave the way for 9,535 housing units. That number actually refers to the units made possible by the zoning changes plus what would have been built without the rezoning. When just talking about housing units added thanks to the rezoning, the estimate is 9,483 units. The City Council didn’t specify that distinction when they made the changes, leading to reports that modifications to the rezoning would reduce potential housing by 141 units.
City Planning estimated that, without the City Council’s changes, the rezoning on its own would potentially add 9,676 housing units (hence the 141 figure). The agency projected that the rezoning, plus what would have been built without the rezoning, would total 9,730 units. So, the City Council modifications reduced the number of potential housing by between 193 and 195 units.
The Council’s carveout in the northwest quadrant did not include any of the 61 “projected development sites” City Planning predicted would take advantage of the rezoning. It did, however, include one “potential” site at 240 West 37th Street, where City Planning initially estimated 293 apartments could be built.
Yet, City Planning pegged the projected loss of apartments, due to the City Council’s change in this quadrant, at 76 units.
Potential sites are considered less likely to be developed in the 10 years following the rezoning (for a number of reasons, such as odd lot shape, tons of commercial tenants or because the lot has already been built out significantly).
The unit projections of the seven potential sites were not included in the initial housing estimates released by the city, so it would be weird to say 293 housing units were lost in this area. A City Planning spokesperson said the the 76 units referred to apartments that would have been converted from office space, in addition to the projected sites.
Another 117 projected housing units were shaved off the units previously estimated because the City Council reduced the maximum residential floor area ratio from 18 to 15 in the southeast quadrant of the rezoning area. I actually checked the four sites affected by this (based on previous unit estimates and lot sizes), and got the same result.
But that, again, is just on the sites City Planning previously identified as likely candidates for redevelopment.
Barbara Blair, president of the Garment District Alliance, believes these estimates lowball the potential housing lost thanks to the City Council’s modifications. She told TRD fellow Quinn Waller that she believes the number to be closer to 1,000 units of housing that will not be built across the nearly 40 properties carved out by the City Council (that, of course, assumes those owners would opt to take advantage of the rezoning or sell their properties to someone who would).
We’ll never know exactly how many properties within the carveout areas would have flipped to residential, if ultimately given the chance.
We will, however, be able to see how many of the 9,535 apartments in the neighborhood ultimately get built over the next decade. Keep an eye out for more coverage from us on the rezoning.
Editor’s note: The explanation of the housing unit projections was updated to clarify how City Planning and the City Council referred to units counts.
What we’re thinking about: What real estate-related books are you reading? Send recommendations to kathryn@therealdeal.com
A thing we’ve learned: Penn Yan, a village in New York near Keuka Lake, is home to the world’s largest pancake griddle, which is 28 feet in diameter. The griddle is on display on Main Street, and was used in 1987 to make a record-breaking buckwheat pancake.
Elsewhere in New York…
— New York lawmakers are launching an investigation into the state’s property insurance market as premiums surge, fueled by climate-driven risks, according to the Times Union. They say insurers are posting record profits while homeowners face skyrocketing costs, threatening affordability and access to housing.
— City councilmembers are pressing Mayor Eric Adams’ administration to enforce a nearly two-year-old law requiring inspections of vacant apartments after neighbors report hazards like leaks, rats and open windows, Gothamist reports. Despite the law passing in December 2023, city agencies have yet to implement the 311 complaint system that would trigger inspections, frustrating tenants and elected officials. — Quinn Waller
Closing Time
Residential: The top residential deal recorded Monday was $12.4 million for a condominium unit at 201 East 74th Street. The Lenox Hill condo is a new construction, 3,800-square-foot unit. Douglas Elliman has the listing.
Commercial: The top commercial deal recorded was $1.1 billion for 590 Madison Avenue. RXR’s Scott Rechler bought the office building from the State Teachers Retirement System of Ohio pension fund in what is the most expensive NYC office sale since 2022 when the Google parent company purchased 550 Washington Street, per reports.
New to the Market: The highest price for a residential property hitting the market was $15 million for a penthouse unit at 515 West 23rd Street. The Chelsea condo is 3,600 square feet and listed by Sotheby’s International Realty.
Breaking Ground: The largest new building project filed was for a proposed 72,065-square-foot, 11-story residential building with 69 dwelling units. Daniel Bernstein of Kutnicki Bernstein Architects is the applicant of record. — Joseph Jungermann